The Bankruptcy Law Firm, Prof. Corp.
Tico Construction Co. v. Van Meter (In re Powell), ___F.4th___ (9th Cir. Ct. Appeals 10/1/24)
Tico Construction Co. v. Van Meter (In re Powell), ___F.4th___ (9th Cir. Ct. Appeals 10/1/24): Ninth Circuit Court of Appeals, in a 2 to 1 decision, holds that even when a person/entity which is NOT eligible to file Chapter 13 bankruptcy, files a Chapter 13 bankruptcy in bad faith, that the person none-the-less has an absolute right to later dismiss the Chapter 13 case, pursuant to Bankruptcy Code section 11 USC 1307(b), which governs debtor’s right to dismiss a Chapter 13 case. This decision is correct based on the wording of 11 USC 1307(b), but will just encourage people who…
Analysis: More Young Adults Filing for Bankruptcy
Bankruptcy filings among 18- to 29-year-olds have surged nearly 17% from Q1 to Q2 of 2024 and are up 13% compared to last year, according to Forbes. While the pandemic sparked a drop in filings due to relief measures, debt among young adults has since risen, reaching $1.12 trillion for 18- to 29-year-olds. Filings have jumped 50% since a 24-year low in early 2022. There’s been a rise in both potential and actual bankruptcy filings since late 2022, and the trend has continued into 2023, says Justin Gillman, bankruptcy attorney at Gillman, Bruton & Capone, LLC in New Jersey. “This…
Credit Card Debt in the U.S. Hits an All-Time High
The Credit & Collection e-Newsletter of 9/9/24 reports that Credit Card Debt in the U.S. hits an all-time high of $930 Billion. Banks and other credit card issuers will fail, if a substantial part of that $930 billion in credit card debt defaults on paying that credit card debt.
Senior Living and Care Leads Record-Breaking Distress in Health Care Sector Bankruptcy Filings
American Bankruptcy Institute (“ABI”) reports, in ABI’s 8/15/24 e-newsletter, that distress levels in health care, as measured by the number of bankruptcy filings, had another record-breaking quarter, led by the senior living and care sector, according to the latest Polsinelli-TrBK Distress Indices Report, McKnight’s Senior Living reported. The Health Care Index reached the highest level of distress in the report’s history for the fifth consecutive quarter, according to the Second Quarter 2024 Chapter 11, Healthcare and Real Estate Distress Indices report. Data show that the current level of chapter 11 filings is almost 50% higher than health care distress at…
US Farmers are in Precarious Financial Position, and So are the Community Banks which Loan Farmers Money, to Enable Farmers to Plan/Grow/Harvest their next season of crops
US farmers are in a precarious financial position, and so are the community banks which loan farmers money, to enable farmers to plant/grow/harvest their next season of crops. The US Congress urgently needs to pass an extension of the current federal farm bill. The current farm bill expires on 9/30/24. But as of 8/15 24 legislation is bogged down in Congress to extend the current version of the federal farm bill expires, or pass a new improved farm bill. Though Congress could extend the current version of the bill for another year before it expires on Sept. 30, Congress should…
SEC v. Jarkesy, 144 S. Ct. 2117, 219 L. Ed. 2d 650 (June 27, 2024)
SEC v. Jarkesy, 144 S. Ct. 2117, 219 L. Ed. 2d 650 (June 27, 2024): This 6/27/24 US Supreme Court case is NOT a bankruptcy case, but it clarifies several previous US Supreme Court decisions that are bankruptcy decisions, including previous US Supreme Court Granfinanciera case on when is there a right to jury trial, and including previous US Supreme Court cases on bankruptcy court’s jurisdiction/lack of jurisdiction, ie Northern Pipeline, and Stern v Marshall. Jaresky is important because Jarekesy makes clear there is NO right to a jury trial in the claims-allowance process in bankruptcy. However, Jaresky does reconfirm…
US Banks Warn of Disaster and Brace for Higher Delinquencies Despite Rate Cut Expectations
US Banks Warn of Disaster and Brace for Higher Delinquencies Despite Rate Cut Expectations, reports 7/29/24 Credit & Collection e-newsletter: Some of the largest United States banks are bracing themselves for some significant losses coming out of their portfolio of personal loans and credit cards as indicated by their financial reports covering the second quarter of 2024. JPMorgan Chase, one of the country’s largest banks set aside nearly $1.2 billion from its revenues to raise its loan loss provision to a staggering amount of $3 billion. They are not alone in this initiative as other big financial institutions like Bank…
In re LTL Management LLC,___F.4th___ (3d Cir. Court of Appeal, 7/25/24), appeal 23-2971
The US Court of Appeal for the Third Circuit quickly dismissed J&J’s second Chapter 11 bankruptcy case. The Third Circuit’s decision dismissing J&J’s second Chapter 11 bankruptcy case (filed by a subsidiary corporation that J&J created for the purpose of filing the second Chapter 11 bankruptcy case) is very clear that bankruptcy cannot be used to deal with mass tort cases filed in non-bankruptcy courts (here the thousands of tort cases filed in nonbankruptcy court alleging that J&J talc caused female cancers), where there is only an “attenuated possibility of insolvency” in the future. The ‘attenuated possibility of insolvency’ in…
Many of America’s 60-Year-Olds Are in Financial Peril
A bruising recession and the disappearance of pensions have left many young baby boomers (people born after world war II ended and up to 1964), who are now 60 or more years old, financially exposed, reports a Wall Street Journal 7/24/24 article. Born in a midcentury, postwar America brimming with promise, many of the youngest boomers are still sporting financial bruises from the 2007-09 recession and are adversely affected by the nation’s steady shift away from guaranteed pensions. “The most important things for me right now are a place to live indoors, water and food,” said one of these Boomers,…
Banks are Bracing for Consumers to Stop Paying Off Their Credit Cards
Banks are Bracing for Consumers to Stop Paying Off Their Credit Cards, reports Credit & Collection e-newsletter on 7/24/24 With interest rates sitting at more than two-decade highs and inflation continuing to bear down on consumers, big banks are preparing to face more risks from their lending practices. In the second quarter, JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo all raised their provisions for credit losses from the prior quarter. These provisions are the money that financial institutions set aside to cover any potential losses from credit risk, including delinquent or bad debt and lending, like commercial real…